“What is intensive distribution strategy?” you might ask. Well, it's the approach that gets your product in front of as many eyes as possible. We're talking every supermarket, every convenience store, even every vending machine if it fits. The more places your product is, the greater the chances people will buy it. There are a few challenges, like managing a wider supply chain and keeping quality consistent. It's a strategy that needs your attention and a strong game plan. Done right, however, it can really push your sales numbers to new heights.
According to the American Marketing Association (AMA), an intensive distribution strategy is a form of marketing where a product is distributed through all available channels in order to flood the market. This method raises a product's visibility and customer reach. Using this strategy can increase market share, enhance brand presence, and boost sales volume.
Companies considering such a strategy need a strong logistics team that can support wide-spread distribution services and have the financial backing to keep up with demand.
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Intensive distribution strategy is all about volume and visibility. It's the marketing equivalent of ‘Go big or go home’. This method pushes your products through as many distribution channels as possible to reach a maximum number of customers.
What effect does this have on your business? From a number's perspective, with more exposure come more sales potential. More places your product pops up, more chances of it getting picked up by customers.
Of course, to accomplish this, you need logistical support services capable of matching your mass production efforts.
Logistical support can come in many forms:
You’ll have to make sure you have the raw materials needed for mass-producing your product delivered on time. Once production is complete, there has to be a way to distribute on a large scale.
In short, you need a professional service that you can rely on for multiple parts of your business, and significant capital to really go big from the start. Let’s explore the advantages and disadvantages of implementing such a strategy and how to manage them effectively.
When it comes to implementing an intensive distribution strategy, several key advantages come into play. The biggest benefit is the visibility you get when your product is available on a large scale.
As a marketing strategy, your major advantages are reflected in the following areas:
When you put your products in front of as many people as possible, someone is going to notice. Major snack and soft drink companies have made it their goal to be available everywhere such products are sold.
You win out over the competition through sheer numbers. In turn, you drive your other major advantages.
The more places and methods used to sell your product, the more chances there are for customers to make a purchase. Consider a scenario where a consumer enters a store looking for a snack. If your snack is available in that store, you've just gained a potential sale.
Having a decent product helps, of course. Consider that same snack scenario. Someone could pick it up by chance, but then recommend it to a friend or even share a portion. Since it’s widely available, it’s likely to pop up sooner rather than later for that individual to be able to buy it for themselves.
Wide distribution helps increase brand visibility. In turn, this builds up easy recognition. For instance, a consumer is more likely to recognize a brand of soap they see in every supermarket aisle or big box store.
Such products become familiar enough to possible customers that selecting and purchasing is an automatic process. People tend to purchase what they are familiar with, especially if they have at least one positive experience with it.
The path to market saturation isn't always smooth, and some significant challenges come along for the ride. Don't let this stop you though, challenges, after all, are just opportunities in disguise. Remember, no successful strategy ever comes without its set of hurdles.
From a logistics standpoint, some of the hurdles you’re going to need to address are:
The more points of sale, the more carefully you’ll need to manage your supply chain. It’s not just about deliveries, either.
You need to consider:
Without investing in a professional logistics service, your strategy won’t make it far enough, fast enough. In the end, you’ll have a mountain of products to sell and no way to get it to your target market.
One of the major disadvantages of intensive distribution is the lack of control you have over your product. Chances are, your brand is spread across a number of outlets, each with a slightly different way of doing things.
The more production facilities you have, the more likely there are to be inconsistencies, especially if you’ve spread the management across different local logistics providers.
Even if products leave your production facilities in perfect condition, there is little guarantee that customers will receive them that way.
A nationwide 3PL can at least provide consistent implementation of quality procedures across different warehouses. They are also able to vet carriers to ensure that shipping and delivery is being taken care of by qualified professionals.
Major brands that distribute intensively are all about having their products in front of as many customers as possible. It takes an incredible amount of planning, a robust supply chain, and bucket loads of perseverance.
Having solid relationships with a number of different retailers also makes a difference. Without retailers to help with product promotion and placement, goals of market saturation fall flat. All of this begins with a clear understanding of their product and where it can perform best.
Major brands that have used this method with success share common habits:
Whether you’re already a large company or a small start-up trying to make it big, these are methods worth studying.
As mentioned, major soft drink and snack companies have used intensive distribution strategies to become everyday staples. Some of the biggest include the Coca-Cola company and Kellogg’s.
However, intensive distribution can be applied in other areas as well:
When the goal is selling products en masse on a national or even global scale, you’re going to need some intensity.
Generally, low-cost and frequently purchased items are perfect for this strategy. These are products that consumers expect to find everywhere.
It’s a product that isn’t trying to be special or exclusive, just practical and within easy reach. If you’re really considering intensive distribution, seriously evaluate whether your products can fit that market segment.
Before leaping into the world of intensive distribution, determine if your product is right for it. This approach isn’t for everything, and forcing intensive actions could lead to financial disaster and damage to your brand.
The standing of your company is equally important to making the method work. Not every startup, or even established businesses with marketing channels in place, can pull off such a strategy.
Let's consider the qualities your product and company should ideally possess before starting on this journey.
Qualities your company should have:
The truth is that this isn’t a strategy for someone just starting. That doesn’t mean it can’t be used by a smaller company, but there needs to be realistic growth plans in place.
Then there is the product, which also has to meet a set of standards to have a chance at success.
This combination of standards results in that rare unicorn of a product that can be both mass-produced and intensively distributed. Despite the comparison, these items aren’t often flashy.
It doesn’t mean they are cheap, though. Walk through your standard grocery store and look at the detergents or soups that are placed right at eye level. They aren’t the priciest or the cheapest, but they are the ones that sell the most.
This is where you want your product to be for maximum exposure and the easiest sell.
As with companies, some products simply don’t benefit from an intensive distribution strategy. These include high-end, niche, or specialty products.
Products that should avoid intensive distribution include:
These products rely on their exclusivity, uniqueness, and a sense of scarcity to maintain their value and appeal. These products drown in a saturated market and their value plummets. When exclusive is everywhere, it’s not exclusive anymore.
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For different types of products, there are alternative distribution strategies. None of them is better or worse than the other in that context. We’ve already reviewed intensive distribution.
The other two strategies are:
These strategies tend to offer a more targeted approach, which is better suited to luxury or niche products. They are also better suited to controlling brand image and protecting large scale investments.
We’ve established that intensively, selectively, or exclusively distributing a product is about more than just personal preference.
If your company doesn’t have the right product or needed capital to benefit from the advantages of an intensive distribution strategy, you are left with the other two options.
Logistically, both are simpler to carry out as far as actual distribution is concerned. A simple breakdown can you provide you with the basics.
With selective distribution, your products are sent to a limited number of retail stores or outlets. This strategy fits companies going after a specific audience or selling products that require a certain level of sales know how. The logistics here need to be reliable but don’t approach the same scale or complexity as in intensive distribution strategy
The logistics for exclusive distribution fall somewhere between the other two. This mostly due to the nature of certain products. With these products, it’s all about providing a high-quality, personalized customer experience. Companies that produce goods with a high level of exclusivity want to make sure they control access and image as much as possible.
Consider this from a numbers perspective for a medium-sized company. According to the Small Business Administration (SBA), this means a business with 100 to 999 employees whose annual revenue is between $10 million to $999 million.
|Distribution Strategy||Market Share*||Cost Range||Logistics Complexity Rank|
|Intensive||70%||$100K - $1 million||10|
|Selective||20%||$200K - $2 million||5|
|Exclusive||10%||$500K - $5 million||7|
*Based on market research reports through IBISWorld
Again, none of this makes one strategy better than the other in a direct comparison. The best strategy will be the one that best fits the product and company it’s meant to distribute.
To get started with an intensive distribution strategy, you need to focus on all the same things that major brands have made common practice. We’ve mentioned them previously, but it’s good to have a clear checklist when starting the process from scratch.
It may seem like a short list, but each step involves a variety of smaller ones. Once you start down the path, you’re likely to pick up momentum. Have everything in place well before to keep the process of spiraling out of control and grinding to a halt.
This leads us to some common pitfalls you should avoid. Should you overlook these, it can result in some pretty serious consequences for your brand. It's like walking on a high-wire between skyscrapers – one misstep and down you’ll go.
Major brands have faced disaster in the following scenarios:
To navigate these pitfalls successfully, you'll need expert advice – someone who's walked the tightrope before and knows where the dangers are. With proper advice and careful planning, Product Distribution Strategy can make the process less daunting. You can enjoy the other side of the rope – where wider market reach and increased sales await.
There you have it, the ins and outs of an intensive distribution strategy – a powerful tool to maximize market coverage and boost sales. Like any tool, its effectiveness lies in how well you use it. That's where we, at Product Distribution Strategy, come in.
We specialize in:
Our team of experts is ready and eager to help you harness the full potential of an intensive distribution strategy.
Take that first step towards greater market reach and increased sales. Give us a call at (855) 863-7672 and schedule your consultation today. With Product Distribution Strategy, your product's journey to the hands of consumers has never been smoother.